Washington – A recent fireside chat with Google’s Chief Economist Hal Varian featured discussion on the flawed reasoning behind proposed tech regulations in antitrust bills like S. 2992, H.R. 3825, and H.R. 3826. Together with the Computer & Communications Industry Association’s Director of Research and Economics Trevor Wagener, Hal Varian countered arguments supporting the proposed legislation and asserted that the bills would create unnecessary rifts in a thriving tech market and harm consumers with unwanted changes to effective services.
Varian discussed the potential unintended consequences of the proposals and explained how subjecting targeted companies to heavy-handed regulatory requirements, structural separation, and prohibitions on mergers and acquisitions would result in the de-integration of user services and create barriers to innovation by disturbing a startup-friendly economic ecosystem.
Varian noted that these bills risked reducing innovation and startup formation, harming the health of the tech startup ecosystem by creating barriers to startup acquisition: “2021 was a record year for startup funding, twice as high as the previous year and ten times as much as a decade ago, and most startups expect to be acquired. […] If you kill the market in acquisitions you’re going to reduce the incentive to create a startup in the first place.”
The Computer & Communications Industry Association has advocated for tech policy that advances competition and innovation for 50 years. The following can be attributed to CCIA’s Trevor Wagener:
“Proposed regulatory measures in antitrust bills like S. 2992, H.R. 3825, and H.R. 3826 would regulate targeted companies with an extremely heavy and bureaucratic hand. The 2020 House Antitrust Report, which contains recommendations behind many of the bills’ measures, makes claims about the competitiveness of the digital economy that are often divorced from economic reality. The bills would harm the digital economy, innovation, and consumers – not protect them.”
Wagener recently calculated the cost to workers’ pension funds if Congress passed legislation that harms key U.S. companies that are typically in the top 10 holdings of many union workers’ pension funds. That study can be found here.